Power prices

I was the National Party’s electorate chair when Max Bradford introduced the power reforms.

It wasn’t an easy time to be a volunteer in the party – people inside and outside opposed the changes.

More than a decade later many still regard them as a mistake and blame them for steep increases in the price of power.

But as this graph from Kiwiblog shows, that is wrong.

Labour are saying that it was the Bradford reforms that led to increased prices. in fact the four years after the reforms saw the smallest increases in 25 years.

Also worth noting that of the increases in the last four years, two of them were due to external factors – the GST increase (which had compensating tax cuts) and the introduction of the Emissions Trading Scheme.

A variety of factors impact on the price of power.

The most obvious one this graph shows is Labour governments and the LabourGreen plan to nationalise wholesale power could well make that worse.

Act x NZ First

The Focus NZ Party, which began life as the Rural Party, has more than 400 of the minimum of 500 members it needs to register as a political party.

The Focus NZ party, headed by Kerikeri farmer and businessman Ken Rintoul, was formed last year around a group of farmers opposed to big rate increases proposed by the Far North District Council. . .

The policies released so far are something of a grab-bag from across the political spectrum, incorporating some of the philosophy and business-friendly approach of Act with a dose of NZ First’s interventionist economic nationalism. . .

Like some other small parties which have started its policies appear contradictory – it wants to cut taxes, which is a business-friendly policy, but it also favours a new tax on international transactions which is business unfriendly.

It’s also opposed to asset sales which isn’t a pro-business stance either.

Fortunately, its chances of being in a position to translate its policies into practice are slight.

Kiwiblog tables the best election results under MMP for parties that didn’t already have an MP in parliament:

• 99 MPs 0.03%
• ACT 7.14%
• Advance NZ 0.05%
• Animals First 0.17%
• Aotearoa Legalise Cannabis 1.66%
• Asia Pacific United 0.02%
• Bill & Ben 0.56%
• Christian Heritage 2.38%
• Christian Coalition 4.33%
• Conservative 2.65%
• Democrats for Social Credit 0.08%
• Destiny 0.62%
• Direct Democracy 0.03%
• Ethnic Minority 0.12%
• Family Party 0.35%
• Family Rights 0.05%
• Freedom 0.02%
• Future NZ 1.12%
• Green Society 0.11%
• Kiwi Party 0.54%
• Libertarianz 0.29%
• Mana Maori 0.25%
• Mauri Pacific 0.19%
• McGillycuddy Serious 0.29%
• Natural Law 0.15%
• NMP 0.05%
• NZ Conservative 0.07%
• NZ Super & Youth 0.06%
• One NZ 0.09%
• Outdoor Recreation 1.28%
• Pacific Party 0.37%
• People’s Choice 0.02%
• Progressive Greens 0.26%
• RAM 0.02%
• Republic of NZ Party 0.02%
• South Island 0.14%
• Te Tawharau 0.02%
• Workers Party 0.04%

So of those 38 parties, only ACT have made it in. 31 parties have failed to make even 1% and six parties made 1%. Of those six, four were effectively Christian parties, plus ALCP and Outdoor Recreation.

That list includes the Christian Coalition which was led by sitting, and former National, MP Graeme Lee.

To add evidence of just how difficult it is for a new party to gain traction you could add to that list parties formed by or with at least one sitting MP who failed to win a seat at the next election. Among them was ROC, formed by Ross Meurant who left National to form his own party and who is on the board of Focus NZ.

The 500 members required to form a party is a very low hurdle and Focus NZ will probably find enough people to jump that. Succeeding from there is much harder.

Persuading people to vote for a new party which doesn’t have an MP and is contesting the list vote only takes a lot of volunteers, a lot of good publicity and a lot of money.

Focus NZ  could be seen as a threat to National but there are already plenty of options for people who don’t want to vote for it.

The new party is much more likely to take the disgruntled vote from smaller parties which could hurt them but it would be a safe bet that Focus NZ won’t attract enough support to win even one seat in parliament.

Look what they do with our money

We don’t have public funding of political forties parties in New Zealand.

We leave that to their members and supporters.

We do have public funding of MPs to enable them to serve their constituents and do their work in  parliament.

The rules are very clear that this money should not be used for party political activities.

Well, that’s how it’s supposed to work in theory.

But Kiwiblog shows that Labour and Green Party have used their parliamentary staff to help get signatures for the petition seeking a referendum on the partial sale of a few state assets.

A mole has leaked to me a couple of strategy documents from Labour and Greens on the referendum they have just purchased with our money. The documents are embedded below, and they show the extent of taxpayer resources used to purchase this referendum.

CIRs are meant to be about the public being able to send a message to MPs, not MPs using taxpayer funds to relitigate an election result. Some key revelations:

>>They aimed for 400,000 signatures as they knew a fair proportion would be found to be invalid.

>>At the 300,000 mark the Greens collected 150,000, Labour 105,000 and Unions 40,000. The Greens are the ones who used taxpayer funding to hire petition collectors.

>>Labour pledged 30 hours per week staff time from their taxpayer funded budget.

>>Greens were using their permament taxpayer funded staff to co-ordinate
The unions had a paid national co-ordinator.

>>They refer to unions gathering “car loads” of organisers and activists to travel to areas.

>>For their day of action, Greens said they will committ five full-time staff – presumably all taxpayer funded, if Labour does the same. That’s 10 taxpayer funded organisers.

>>A list of unions to pressure to do more, including PPTA, NZEI, Nurses Organisation – minority shares in power companies of course being key education and health issues!

It is very clear that there has been very few ordinary citizens involved in this petition – mainly a legion of taxpayer funded staff and union staff. . .

This isn’t a Citizen’s Initiated Referendum. It’s a politicians’s one and you and I have paid for it.

Dodgy numbers

Last week Social Development Minister Paula Bennett issued media releases which said the future focus was helping to reduce the number of people on benefits and benefit figures were under forecast.

Yesterday the Herald on Sunday featured Labour’s Jacinda Ardern saying more people were on benefits.

So who’s right?

Kiwiblog has the figures:

Let’s look at the actual data, in terms of increase or decrease each year. For DPB they are

• 2008 +2,128
• 2009 +9,007
• 2010 +3,576
• 2011 +1,365
• 2012 -5,112

I think we now understand why Jacinda left the 2012 figures off. What I don’t know if why the Herald on Sunday did.

Let’s do the same with Invalid’s Benefit numbers.

• 2008 +3,419
• 2009 +1,537
• 2010 +67
• 2011 -1,062
• 2012 -472

And for those interested in the Unemployment Benefit.

• 2008 +7,760
• 2009 +35,820
• 2010 +756
• 2011 -7,120
• 2012 -6,217

They all show the same thing. The increase in benefit numbers started in 2008 (under Labour) and worsened in 2009 as the Global Financial Crisis struck.  Despite patchy economic growth since 2009, benefit numbers in all three categories have fallen in the last two years.

And Lindsay Mitchell provides more analysis which shows Ardern is wrong.

Opposition MPs are supposed to show up government failings but it’s not at all clever to use dodgy stats to do it.

Reporters are supposed to check facts and provide balance, the one who wrote this story failed on both counts.

2012 in review

The WordPress.com stats helper monkeys prepared a 2012 annual report for this blog.

Here’s an excerpt:

About 55,000 tourists visit Liechtenstein every year. This blog was viewed about 300,000 times in 2012. If it were Liechtenstein, it would take about 5 years for that many people to see it. Your blog had more visits than a small country in Europe!

The top referring sites were:

1. nominister.blogspot.co.nz
2. kiwiblog.co.nz
3. nzconservative.blogspot.co.nz
4. keepingstock.blogspot.co.nz
5. asianinvasion2006.blogspot.co.nz (Cactus Kate)

The post which got the most comments (51) was water quality concern for all.

The people who made the most comments were:

• 1 robertguyton 375 comments (who blogs eponymously)
• 2 Andrei 343 comments (who blogs at NZ Conservaitve)
• 3 Gravedodger 172 comments (who blogs at No Minister)
• 4 adam2314 161 comments (who blogs at Inquiring Mind)
• 5 robertguyton 160 comments

Robert Guyton # 1 and # 5 is the same person, I think he gets two spots because some comments are linked to his blog and others aren’t.

Thank you all for visiting, those who link and hat tip from their blogs and those who join the conversation.

I appreciate your comments, whether or not I agree with them. A conversation among several is far more interesting than a one-woman diatribe.

I especially appreciate that almost everyone debates the topic and critiques arguments rather than resorting to personal criticism.

I think I had to delete only one comment last year and only rarely had to take a deep breath.

And thanks to WordPress for the blogging platform and excellent service on the very rare occasions I’ve needed help.

Click here to see the complete report.

Change system & incentivise low inflation

The Remuneration Authority has recommended a small increase in pay for MPs and that has resulted in the usual carping:

While Christmas is still grim financially for many New Zealanders, politicians – who earn nearly three times the average wage – are about to pocket even more. . .

Good MPs are worth far more than they get.

I have some idea of the challenges my MP Jacqui Dean faces servicing an electorate which covers an area of 34,888 square kilometres as well as chairing a select committee and she more than earns her salary.

Others are overpaid for the little they appear to do but the system doesn’t differentiate for performance, or lack of it.

It’s no use criticising the MPs for the pay increase, the Remuneration Authority is an independent body.

But I would support the change in the system suggested by Kiwiblog :

. . . The easy way to solve this, is what I have long advocated - set the salary and associated terms around three months before each election, for the next term of Parliament.

So MPs would get elected to Parliament for a term, on a known salary which remains constant during that term. . .

That’s simple and fair.

It has the added advantage of incentivising MPs to keep inflation low so they don’t lose the real value of the salaries.

 

 

Another Treaty settlement ticked off

Treaty Negotiations Minister Chris Finlayson has ticked off another Treaty settlement with the signing of a deed of settlement for all outstanding historical Treaty claims with Ngati Toa Rangatira.

“Today’s settlement highlights the importance of putting the injustices of the past behind us,” Mr Finlayson said. “The actions of the Crown, that included political and military action against the senior Ngati Toa chiefs, ultimately left Ngati Toa virtually landless and without resources in both the North and South Islands. We can never fully compensate for the wrongs of the past but this settlement enables Ngati Toa to build a stronger future.”

The Minister was named MP of the Year by Trans Tasman and topped the NZ Herald’s ministerial rankings.

His record for settling Treaty claims alone is impressive.

Kiwiblog has a chart which shows the productivity of Treaty Negotiations Ministers:

As you can see Doug Graham started them off, and saw through the two largest ones of Ngai Tahu and Tainui, along with a few others in 1999.

Margaret Wilson in four years only managed five agreements, and finished off three of Graham’s.

Mark Burton did just two agreements in three years. So for seven years, there were just eight agreements in principle. At that rate we’d still be negotiating these in 2050!

Michael Cullen did a pretty good job of picking the pace up. He did 12 agreements in just one year!

And Chris Finlayson in four years has done 48 agreements or settlements. We won’t make the goal of having all settlements done by the end of 2014, but we’ll be pretty well advanced towards it.

Even those who are not fans of the settlements, should appreciate the benefits of getting them done sooner or quicker. No party in Parliament (from ACT to Mana) claims these should not happen. . .

Ngai Tahu provides a wonderful example of what happens when an Iwi moves from grievance to growth.

Its Treaty settlement has been put to good use and the investments are not only providing benefits for its own people but are making a significant contribution to the South Island economy and New Zealand.

Spot the contradiction

Labour says it wants to make housing more affordable.

It’s even prepared to put public money into building basic houses for first home buyers.

* KiwiBuild: a 10 year programme to build 100,000 basic homes for first home buyers (less than $300,000). In partnership with the private sector and community housing groups.

* Two thirds of the homes built in the first 5 years will be in Auckland. Others will be in other ‘unaffordable’ centres such as Christchurch, Tauranga, Nelson, Wellington and Queenstown.

* Cost: a one-off $1.5 billion initial investment, to be recouped as homes are sold. Will also sell ‘housing affordability bonds.’

Though as Kiwiblog points out that $1.5 billion doesn’t take in into account the cost of interest.

Cactus Kate points out it doesn’t appear to be means tested.

That would, like several of the bribes from the last Labour government, mean help for those who don’t necessarily need it.

Another flaw in this policy is the contradiction between this attempt to make housing more affordable and the commitment to a capital gains tax which would make property more expensive.

It’s not the only contradiction from Labour’s weekend conference. The party also voted to reduce the voting age to 18 16 although it wanted to increase the purchase age for alcohol to 20.

Diversionary tactics

David Shearer needed something to take attention off his leadership at his party conference this weekend and he’s got it - remits straight from Planet Labour which Kiwiblog has summarised:

• Nationalisation of any partially sold assets
• A financial transactions tax
• Require all private boards to comply with a 50% gender quota within five years
• A universal child benefit so millionaires get paid money for having kids
• 52 weeks paid parental leave (why stop there – go for 18 years I say!)
• Lower the voting age to 16
• A gender quota for the House of Representatives (why not a race and sexual orientation quota also!)
• Compulsory Te Reo Maori until age 15
• End all funding of private schools (which ironically will force them all to be integrated and go from 25% funding to 100%)
• Bring ban the food police to school tuckshops
• Ban seabed mining for minerals oil and gas
• Ban fracking
• A tax on aquaculture
• Ban all coal mining
• A mineral exports tax
• Ban plastic bags
• Fund a brand new commercial free TV broadcaster
• Fund a Pacific TV broadcaster
• A Super Gold card for transport for under 21s
• A rail link to the airport for Auckland (think how much taxes will be gong up to pay for all of this)
• A petrol tax to fund rail
• Set up a state owned insurance company to compete with private insurers
• De facto compulsory unionism by forcing all employees to “contribute to the benefits of enterprise and multi-enterprise bargaining”
• Turn contractors into employees
• Reverse employment law changes and destroy NZ as a location for international film making
• Ban companies that do not pay a “living wage” (which is much higher than the minimum wage) from winning government contracts
• Compulsory worker representation on large company boards
• Direct Kiwirail as to whom must win their tenders
• restore the social obligation to the SOE Act (despite the fact they were never repealed!)
• Insert the Treaty of Waitangi into the Constitution Act
• Raise the age of Super to 67 – except for Maori!
• That the Government should create state owned and managed retirement homes
• That all single benefits be increased by $50 a week!!!
• That any NGO receiving even minimal government funding be required to have a 50% gender quota on its governing board!
• Bring back compulsory membership of student associations

These aren’t just wacky ideas by an errant member, most have been passed by a regional conference and some have been endorsed by the party’s  NZ council.

Passing any or all of these would be a superb diversionary tactic. If they became policy in a labour-led government they’d carry on diverting the country away from the direction it needs to go.

Oh dear, wherever Planet labour is, its inhabitants are several galaxies away from the sort of policies which will make New Zealand a healthier, better educated, wealthier and more secure country.

Dare we hope?

The Sunday Star times reports that New Zealand has been tipped to quit the Kyoto Protocol.

Kiwiblog points out that isn’t the case. We’ve committed to the five-year period which ends in 10 weeks.

There is no international agreement for any commitment after that.

There is growing speculation the Government’s silence is because it could save face internationally by waiting for big players like China and the US to refuse to sign up to the second Kyoto round, before following suit.

Of course, as it would be economic and environmental madness to have an agreement without them (or India).

But not unilaterally agreeing to a future binding commitment, is vastly different to walking away from a current commitment. If reporters can not understand this, then here’s an analogy.

If I lend you $1,000 and you agree to pay me back $200 a year, and then after five years you have paid me back, are you walking away from your commitment if you don’t keep giving me money in the future?

But OM Financial carbon broker Nigel Brunnel thinks New Zealand will sign up to new commitments in Doha, but then delay ratifying them. That could buy time to pursue aligning with a group of Asia-Pacific partners, and adopting voluntary emissions targets outside of Kyoto.

That fits into two of the Government’s climate-change themes, New Zealand doing its share, and not damaging competitiveness by enforcing heavy carbon payments on businesses when trading partners like the US and China do not.

Because of that, about 85 per cent of world carbon emissions are not covered by international reduction agreements, and it is said in government circles that China’s emissions increase daily by New Zealand’s entire annual carbon output.

It is simple. Any agreement which doesn’t include binding targets by China is worthless in an environmental sense.

The Kyoto Protocol was the triumph of politics and bureaucracy over science and common sense.

It was riddled with inconsistencies for example the liability for some products fell on producers, for others on consumers.

It also used a blanket approach which took no account of individual countries’ differences. The clause which required trees to be replanted where previous ones had been cut down might have made sense if the aim was to preserve native forests. But it made no sense in New Zealand where it might be better to use flat land where pine trees had been felled for pasture and plant trees on steeper land where they would prevent erosion.

It also took a local approach to a global problem which could have perverse consequences. New Zealand has a very high proportion of carbon emissions from animals but we’re also leaders in efficient production of food. Nothing would be achieved for the environment if costs here led to lower production here and higher production from less efficient farmers elsewhere.

So the SST is wrong. We’re not quitting Kyoto but dare we hope New Zealand won’t make any commitment for a second phase and instead put scientific efforts and money into initiatives that really will help the environment without wrecking the economy?

Bradford vindicated?

The opposition to power reforms of the 1990s and their architect Max Bradford were a significant contributing factor to the loss of the seat of Otago for National’s Gavan Herlihy.

David Parker, who won the seat, told a pre-election meeting in 2002 that they were one of the factors which motivated him to stand for Labour.

But were they really so bad?

Kiwiblog has a graphic, originally from the ODT, which shows they did work as intended:

Regulation and re-regulation aren’t the only factors which affected prices.

The reliance on hydro generation puts pressure on supply and therefore price if there is a drought which reduces the water flow into the lakes behind dams.

But prices went down when retail competition was introduced and went up again when Labour re-regulated the electricity market.

 

Lobbying Disclosure Bill goes too far

The intent of Green MP Holly Walker’s Lobbying Disclosure Bill is good but it goes far too far.

Jordan Williams argues it will do the opposite of what is intended, distancing people from MPs and creating a lobbying industry:

 The bill makes lobbying activity a criminal offence for all but those preregistered with the auditor-general.  It requires all communications, even informal conversations, to be publicly disclosed with the client’s identity and interests detailed. 

    The bill is badly drafted.  For example it defines “lobbying activity” so widely that it covers any business writing to an MP. 

    Further, it covers even the most modest or ancillary advocacy.  An accountant emailing an MP about a tax policy on behalf of a client will be committing a criminal offence unless the accountant is a registered lobbyist.  A fine of up to $10,000 for individuals and $20,000 for companies can be imposed.  Even a local farm manager complaining to the local MP at the supermarket about emissions policy would be covered. 

    The bill doesn’t just cover businesses.  The inclusion of voluntary organisations mean a single email sent by a manager on behalf of a local RSA is illegal unless the manager is also registered as a “lobbyist”. The problem the bill tries to resolve doesn’t exist. . .

Instead of improving transparency this Bill will put barriers in the way of ordinary people who wish to communicate with MPs.

Our MPs are accessible in a way that those in most other countries aren’t.

The few who like to keep a distance from the public might like the protection this Bill will give them but most will regard it as an impediment to open and frank communication.

It is being driven by the Green Party paranoia about big business and will get in the way of ordinary people and their elected representatives.

Kiwiblog would like the Bill to be amended but doubts if it is possible to do so without the unintended consequences.

Holly responded to Jordan’s post here.

He offered to help improve the Bill but writes on Facebook:

The Green Party appear to have deleted my comment on their blog site, responding to Holly Walker‘s post regarding my opinion piece in today’s DomPost (posted earlier).  Specifically she implies that unlike others I have not offered suggestions to improve to Bill.  That is not true.  I will post the response here:

“Hi Holly, yes the Bill does have a good intention, I don’t deny that, but its effects will damage our culture of easily accessible MPs. Laws need to be assessed by what they say and what they do, not what they are intended to do.

I take issue with your remark that I have not offered to improve the Bill, indeed I personally emailed you on 17 April offering my firm’s time (free of charge) to suggest improvements to the Bill that would avoid the very criticisms I make of it.

He then gave an update saying his comment was up but she had “removed the offending sentence.”

How bad is fracking?

Kiwiblog might be guilty of hyperbole in saying fracking saves the planet but it is reducing carbon emissions:

In a surprising turnaround, the amount of carbon dioxide being released into the atmosphere in the US has fallen dramatically to its lowest level in 20 years, and government officials say the biggest reason is that cheap and plentiful natural gas has led many power plant operators to switch from dirtier-burning coal.

Many of the world’s leading climate scientists didn’t see the drop coming, in large part because it happened as a result of market forces rather than direct government action against carbon dioxide, a greenhouse gas that traps heat in the atmosphere.

Michael Mann, director of the Earth System Science Centre at Penn State University, said the shift away from coal is reason for “cautious optimism” about potential ways to deal with climate change. He said it demonstrates that “ultimately people follow their wallets” on global warming.

“There’s a very clear lesson here. What it shows is that if you make a cleaner energy source cheaper, you will displace dirtier sources,” said Roger Pielke Jr, a climate expert at the University of Colorado.

In a little-noticed technical report, the US Energy Information Agency, a part of the Energy Department, said this month that total US CO2 emissions for the first four months of this year fell to about 1992 levels. The Associated Press contacted environmental experts, scientists and utility companies and learned that virtually everyone believes the shift could have major long-term implications for US energy policy.

While conservation efforts, the lagging economy and greater use of renewable energy are factors in the CO2 decline, the drop-off is due mainly to low-priced natural gas, the agency said.

A frenzy of shale gas drilling in the Northeast’s Marcellus Shale and in Texas, Arkansas and Louisiana has caused the wholesale price of natural gas to plummet from US$7 or $8 per unit to about $3 over the past four years, making it cheaper to burn than coal for a given amount of energy produced. As a result, utilities are relying more than ever on gas-fired generating plants. . . 

. . . The boom in gas production has come about largely because of hydraulic fracturing, or fracking. Large volumes of water, plus sand and chemicals, are injected to break shale rock apart and free the gas. . .

. . . Despite unanswered questions about the environmental effects of drilling, the gas boom “is actually one of a number of reasons for cautious optimism,” Mann said. “There’s a lot of doom and gloom out there. It is important to point out that there is still time” to address global warning.

This might not be a long-term change but market forces and fracking are reducing carbon emissions.

There are questions about the safety of fracking. Drew Hutton, president of the Lock The Gate Alliance in Australia; and Rosalind Archer, Associate Professor at the Department of Engineering Science at Auckland University debated the issue on Nine to Noon last Thursday.

Professor Archer (at about 15:50) said there is evidence of a small number of problems caused by very bad practices, shoddy well construction and very poor monitoring. But:

 . . . there are other jurisdictions where, or instance, the US State of Ohio has records of 80,000 fractured wells with no evidence of ground water contamination.

In my opinion this is something that can be done right . .  the head of the US Environmental Protection Agency said she thinks it can be done right. Recently the Royal Society for Science and Engineering in the UK also came out saying that fundamentally this is a process that can be done right so I think New Zealand just needs to learn from international best practice. . .

That practice is improving all the time and it is possible the debate could be overtaken by technical advances:

Chimera Energy Corporation of Houston, Texas, has announced that they are licensing a new method for extracting oil and gas from shale fields that doesn’t contaminate ground water resources because it uses exothermic reactions instead of water to fracture shale. . .

. . . Despite the fact that fracking is used mainly in deep, sealed geological deposits, there is the fear that it may pose a danger to groundwater. Depending on the method involved and the type of oil field, various other materials are added to the water used in fracking, such as sand, foaming agents, gels and friction reducers. The concern is that the water, which is pumped out after the process, may either leak these substances plus radioactive radon from the well directly into aquifer layers, or contaminate water supplies after pumping out.

For this reason, some fracking engineers prefer non-hydraulic methods. One of these, used recently in New York State, swaps the water for gelled propane. The idea being that the propane reverts to a gas at the end of the process and can be pumped out, leaving any additives behind in the well, much like boiling seawater and leaving behind the salt.

The Chimera process takes this a step further by eliminating any working liquid. Details of the process have not been made public yet due to patent concerns, but Chimera Energy uses what is called “dry fracturing” or “exothermic extraction.” First developed in China, this involves using hot gases rather than liquid to fracture the shale. This was originally intended for wells in arctic regions where water used in fracking freezes, but Chimera Energy has developed it for general use. . . 

 If this proves to be practical and safe it still might not be good enough for everyone who opposes fracking.

But then some opposition isn’t to fracking in particular it’s just the means of demonstrating opposition to mineral extraction in general.

Greens want to keep milk price high

Remember how the Green Party was concerned about high milk prices in New Zealand and wanted something done to make it cheaper?

They’ve changed their tune now and want to keep Canadian milk prices artificially high.

They don’t say that explicitly but that’s what their oppositionto the Trans Pacific Partnership  which would remove agricultural regulations such as Canada’s supply management system for dairy, which aims to preserve farmers’ livelihoods would do.

These farmers’ livelihoods are being paid for through higher prices for dairy products paid for by tax payers and consumers.

A free trade deal which opens the Canadian market to dairy products from other countries – including New Zealand and their closest neighbour the USA – would improve the range and lower the prices for consumers.

It would make life more difficult for some Canadian dairy farmers just as removing subsidies in the 80s did for farmers here, but I don’t know a single farmer who wants the protection back.

Once  Canadian farmers adjust they’ll find they are much better off answering to the market rather than to politicians and bureaucrats and consumers. If they’re not they’ll follow market signals and swap to a different land use from which they can make a decent living without the need of protection or subsidies; or they’ll sell to someone who can cope with the real world.

As Anti Dismal says:

 . . . Some Canadian farmers can’t make a living without regulation and protection, so they should be doing something else. Also the farmer’s lifestyle is costing Canadian taxpayer a huge amount. De-regulation would remove much of these costs to the Canadian taxpayer.

Hasn’t Metiria noticed that New Zealand de-regulated its farming in the 1980s, and yes some farmers went under, but today farming is better and stronger then it ever was under the old protection and regulation regime. . .

Kiwiblog nails it:

. . . So the NZ Green Party is against NZ dairy farmers being able to have fair access into Canada!!! Their concern is to protect inefficient subsidized Canadian farmers, not to help NZ farmers export more milk. . .

. . . The Greens basically don’t like trade. They voted against the FTA with China which has seen us export an extra $12 billion to China since it was signed. They want Canada to keep up its tariffs of up to 300%.

As the most remote developed country in the world, trade is vital to our future. Yet, the Greens want to kill it off. . .

The Green party wanted New Zealand farmers to subsidise New Zealand consumers when the price of milk increased here. Now they want Canadian taxpayers and consumers to keep subsidising Canadian farmers and keep New Zealand produce out of that market.

Any subsidies or protection is unfair and expensive to taxpayers, consumers and other producers.

This is the party which says it promotes fair trade but it doesn’t accept that if it’s not free it’s not fair.

Little Green Lies

The green movement is very good at emotional claims, but not all of them stack up under scrutiny.

The book Little Green Lies: An exposé of twelve environmental myths by Jeff Bennett,has put a dozen of the claims under scrutiny and found them wanting:

There are twelve propositions addressed in the twelve chapters of this book. Although each proposition is considered in a separate chapter, many of them are interrelated. In the list of the propositions that follows, a short outline of each ‘little green lie’ is set out along with a brief exposition of the counter-proposition that will be advanced in this volume.

Proposition 1:‘Peak Oil’ has been reached.
The annual production of oil, while rising over the last century, is about to fall because of growing scarcity. Such is our dependence on oil and the fast rate at which we are using it that we now need to take active policy measures to save what we have left.
BUT
No-one knows for sure what petroleum reserves are available. As known reserves are depleted, price rises stimulate more exploration and technological advances that will expand the available supply of petroleum as well as substitute energy sources.

Proposition 2: Renewable energy production should be stimulated.
Non-renewable energy supplies are being depleted so quickly that we will soon experience power shortages. Non-renewables are also ‘dirty’ sources of energy. Renewables must be stimulated to ensure the on-going supply of clean energy.
BUT
Renewable energy sources are limited in their short to medium term potential to meet demand. Picking ‘winners’ to be stimulated is likely to be mistaken given rapidly evolving technological change. Renewables have their own environmental downsides.

Proposition 3: Consumption choices need to be informed by products’ ‘food miles’/’ecological footprint’/’embodied energy’/’virtual water’/’carbon footprint’.
People need to be aware of the impacts they have on energy/the ecology/water/climate etc. when they buy goods and services so that they can reduce their impact on that resource. Each of these resources is scarce and we need to conserve them, especially for future generations.
BUT
By focusing on just one scarce resource (water, energy etc.) in their consumption decisions, people can ignore their impacts on other scarce resources and result in a ‘false economy’. What happens when the ‘virtual water’ index goes against the ‘embodied energy’ index? Which index is ‘trumps’?

Proposition 4: World population should be capped.
More people mean more pressure on the world’s scarce resources, including the environment. The only way to protect the environment, stop starvation and ensure that there are enough resources for future generations is to stop population growth.
BUT
People are a resource. They have the capability to develop innovative technologies and institutions to deal with growing scarcity in specific resources. New ways to satisfy peoples’ wants and new sources of scarce resources can be discovered.

Proposition 5: Economic growth and trade are bad for the environment.
Economic growth, fuelled by international trade, means more pressure on scarce resources including the environment. To protect the environment and to save resources for the future, trade should be restricted to cut growth.
BUT
Trade and growth bring wealth to people. Wealth increases peoples’ demands for environmental protection and the ability of society to provide environmental protection, especially through technological development.

Proposition 6:No waste should go to landfill.
Waste should not be wasted. It is a resource that can be re-used and re-cycled. Sending waste to landfill means that more ‘virgin’ resources must be harvested/mined. Waste in landfill can also be a source of air and water pollution.
BUT
Recycling and re-using ‘waste’ is a process that uses scarce resources. Policies that prevent landfill disposal can cause more resources to be used than they save and do not necessarily reduce virgin resource use. Landfills need not be pollution sources.

Proposition 7:Water and energy should be used ‘efficiently’, whatever it costs.
Water and energy are scarce resources. Their use needs to be minimised so that future generations will have enough. Governments should invest in technologies that ensure the least amounts of energy and water are used in producing goods and services.
BUT
Investing in ‘efficiency’ measures means using other scarce resources as substitutes for energy and water. A ‘false economy’ results because the other resources including labour and capital may well be scarcer than energy and water.

Proposition 8:The environment is of infinite value and must not be harmed.
The environment provides us with our ‘life-support-system’. Without it we cannot survive and so we should protect it at all costs. We should make absolutely sure that rare and endangered species are cared for so that their numbers increase.
BUT
Without the environment we could not exist and so its absolute value is infinite. However, that is not the relevant question for policy. Changes to the state of the environment yield finite benefits and costs that need to be traded off.

Proposition 9: We must reduce greenhouse gas (GHG) emissions to avoid global climate change.
Human induced global climate change is a serious threat to the continued ability of the planet to support humanity and current ecosystems. The damage caused by climate change will be so large that GHG emissions must be reduced now.
BUT
Reducing GHG emissions would be costly. The decision to bear those costs should be made with reference to the expected benefits reduced GHG emissions would yield. Reducing GHG emissions will not eliminate the risk of climate change.

Proposition 10: The care of the environment cannot be entrusted to the private sector.
The environment provides ‘public goods’ that should be available to all for free. That means the government has to be responsible for caring for the environment. The private sector will either destroy it or try to profit from it.
BUT
The public sector will face problems in managing the environment. Information for decision making is costly. Incentives for politicians and bureaucrats can conflict with public best interest. Private solutions can be lower cost and better aligned with society’s well-being.

Proposition 11: Agriculture and mining are always in conflict with the environment.
Agriculture and mining are extractive industries which deplete our stock of natural resources, often irreversibly. They also cause environmental degradation including soil erosion, biodiversity loss and chemical contamination of water and air.
BUT
While there are some trade-offs between agriculture, mining and the environment these can be reduced through the use of management techniques and technologies. Offsets and remediation work on farms and mines can improve the environment.

Proposition 12: Decisions regarding the future of the environment should be made using the ‘precautionary principle’.
If there is a risk that a proposed action will harm the environment, the precautionary principle requires policy makers to place the burden of proof on those proposing an action that it will not cause environmental damage.
BUT
There is always some risk of environmental harm resulting from human action. Demonstrating that there is no risk of harm is impossible. There are also uncertainties associated with not taking action which the precautionary principle ignores.

This writer is not an ill-informed zealot. His qualifications are impressive:

Jeff Bennett is Professor of Environmental Management in the Crawford School of Economics and Government at the Australian National University. He is a Distinguished Fellow of the Australian Agricultural and Resource Economics Society and a Fellow of the Academy of Social Sciences in Australia. Jeff lectures, researches and consults on the economics of environmental policy issues.

None of this takes away from the need to tread lightly on the earth but it does reinforce the need to base claims on science.

Good intentions aren’t enough if they’re doing more harm than good.

Hat Tip: Kiwiblog

Labour in headlines for all wrong reasons

In Budget week when eyes and ears tend to be on the government, Labour is in the headlines but for all the wrong reasons.

Shane Jones has been referred to the Auditor General over his decision to grant Chinese immigrant Bill Liu citizenship, at last.

He’s also been stood down from his portfolios – for the second time. As Lady Bracknell may be regarded as a misfortune, twice looks like carelessness.

David Shearer said:

“Based on my discussions with Shane Jones, I believe that he followed a proper process. But given the differing statements made in and outside of court and the questions that have been raised publicly, I believe that an independent agency should review the case.

“I’ve asked for the Auditor-General to look into all the departmental as well as ministerial processes involved in this case.

But the problem is about much more than the process. It is possible to make a mistake with the process and arrive and the right decision and to follow the correct process and still reach the wrong decision.

Keeping Stock has a round-up of news stories giving some background.

Kiwiblog asks several valid questions which need to be answered not least of which are the links between Jones’ decision and Liu’s donations to the labour Party.

All of that points to a lot more than a problem with the process.

It also points to Labour’s ongoing challenge to look like a government in waiting. Unless and until it sorts itself out, it will struggle to convince enough voters to give it the support it needs to lead a stable coalition.

If it can’t manage itself, it can’t be trusted to manage a multi-headed coalition.

UPDATE: Keeping Stock has spotted an immigration case where Jones disregarded submissions on humanitarian grounds on the advice of officials. That contrasts with the Liu case where he ignored official advice.

Fathers are parents too

The headline says: working mothers caught in childcare trap.

The story begins:

A generation of young, educated New Zealand women is being lost to the workforce because they can’t afford childcare.

Many tertiary educated and trained mothers are deciding to retrain as teachers or nurses, professions that offer more flexible work options.

Some are opting for temp work, and others said returning to the workforce was not worth their while.

Passing quickly over the insult to teaching and nursing, it is only in the 16th paragraph that there is any mention of a father:

Laura Lyttelton has two children, aged three and 16 months. She returned to work after having them, and in the last six months resumed full-time work. When she and her partner were both working full time they had a joint income of about $90,000.

But now, she said, childcare had become so expensive it was better for her partner to resign from his work so he could get Working for Families tax credits.

Fathers are parents too, yet this story is typical of almost all on childcare which portray it as a woman’s issue.

Then there’s the irony that a story complaining about the costs of childcare and suggesting the government spends more on it, also shows that existing government assistance – WFF – provides a disincentive to work.

Paid Parental Leave is also mentioned. Arguments in favour of that include the benefits of at least one parent staying at home with children yet this story also mentions the benefits of workforce participation.

Yet more proof, life requires choices and there are costs and benefits to them all.

UPDATE: Kiwiblog looks at the stats in the story.

Money doesn’t matter?

Kiwiblog has a table showing how much each party spent per vote gained in last year’s election.

The top spender was the Conservative Party at $31.71 a vote and the lowest was the Aotearoa Legalise Cannabis Party at 34 cents per vote.

National spent $2.19 and Labour $2.91 for each vote gained.

This  doesn’t mean money doesn’t matter, but it does show that spending lots doesn’t guarantee success.

The figures are for  spending on the party vote campaign. Parties which had candidates in electorates would have some benefit from money spent on and effort put into those campaigns too.

Welcome changes for local government

Local government Minister Nick Smith’s has announced an eight point reform programme for local authorities:

1. Refocus the purpose of local government - to change from the ‘social, economic,environmental and cultural well-being of communities’ to ‘providing good quality local infrastructure, public services and regulatory functions at the least possible cost to households and business.’
2. Introduce fiscal responsibility requirements – will allow Government to set fiscal limits for Councils such as debt, income and expenditure levels. Flexibility in case of disasters though.
3. Strengthen council governance provisions – will allow Councils to set a cap on staff numbers and set a remuneration policy. Also salaries to be disclosed in bands like for central Govt.
   Also powers of Auckland Mayor to be extended to all Mayors – to appoint Deputy Mayor, Committee Chairs and propose the budget.
4. Streamline council reorganisation procedures
5. Establish a local government efficiency taskforce
6. Develop a framework for central/local government regulatory roles
7. Investigate the efficiency of local government infrastructure provision
8. Review the use of development contributions.

The first point by itself will mean better focus for councils, less work for staff and councillor’s and lower costs for ratepayers.

The power of general competence was a mistake which took council’s focus from core business an added significant costs to ratepayers.

Hat tip Kiwiblog.

 

9/9

9/9 in the NZTA quiz on who give way to whom with the new road rules.

Hat tip: Kiwiblog

Comment after the break best read after you do the quiz in case it spoils it.